Dislocations in trading, pricing remain in municipal market
By Lynne Funk, Christine Albano, Chip Barnett
Apr 30, 2020
The municipal secondary was steady according to AAA benchmarks but several trades pointed to dislocations on several high-grade names.
Market participants indicated the dislocations were likely attributable to month-end accounting issues.
There still was a relatively quiet tone in the market Thursday (Apr 30, 2020) spurred by a range of technical issues, from month-end accounting and financing to spread widening, price volatility and the COVID-19 impact on businesses and the economy, sources said.
“It’s a day with scales unchanged, but certainly a wariness in the muni markets,” John R. Mousseau, president and chief executive officer and director of fixed income at Cumberland Advisors, said Thursday afternoon.
“There’s clearly a hangover from Mitch McConnell’s statement from last week,” he added, pointing to the U.S. Senate Majority Leader’s comments on April 22 that cash-strapped states impacted by COVID-19 declare bankruptcy.
“The big question is do we ramp back to 95% economic activity pre-crisis — which is still a recession — or to 80% of pre-crisis, which is near Depression levels,” Mousseau said.
Read the full article with subscription (paywall) at The Bond Buyer website.
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.